Analysis of corporate income tax returns
) When filing tax returns for a company, there are cases where the responsible accountant did not enter information correctly. Electronic filing system rejections are common, and errors of omission can lead to some of these rejections (Hamilton & Smith, 2020). This is essentially relevant information related to corporate transactions, but is not included when filing tax returns. Dividends received by a company are usually recognized as one of the profits of the organization. In response, Fun Fair of Russia remitted dividends of $14,000 to Zeus, but did not declare them as capital or profits at the time of filing. Zeus Inc. paid attorneys $10,000 to obtain tax-exempt securities. This amount is recognized as ordinary expense. Accountants who are taxed for filling out Form 1120 do not account for these fees. A company needs to know its taxable income for a specified period. The IRS has a rule requiring corporations to evaluate their records and report income and expenses(IRS, 2021). This indicates that the expense is part of the record that should be included to obtain the total amount from which taxes are deducted.
Deductions must be made on Form 1120. One of the most important deductions to report is the $400,000 in dividends. Dividends paid to common stockholders should be included in the Zeus deduction in 2020, as this is required under the Dividend Tax Act (Legal Information Institute, 2022). With regard to the income tax benefits paid for premiums, shareholders can obtain from…
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